Mehabe score: 2 G Factor: 0 Piotski Score: 6 The stock has a rating OBSERVE & HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 0 and Piotski score of 6.
Description
Revathi Equipment Ltd is in the business of manufacturing blast hole drills and water well drills for various applications like mining, construction, water well, exploration, etc. It has over 4 decades of product & service experience and has manufactured & sold over 1000 drillings rigs worldwide.#
Main Points
Drilling Equipment Division (47% of revenues)
The company generates revenues by selling drilling equipment to various customers. It also provides spares and after-sales service to the existing customers.#Site:REVATHI
Market Cap:
Rs 222 cr
Price:
722.0
Trading pe:
42.5x
Book-value:
571/share
Div yield:
0.00 %
Earning yield:
8.73%
Face-value:
10.0/share
52week high:
842.25
52week low:
369.40
Technical Analysis
Stock trades at 722.0, above its 50dma 577.46. It also trades above its 200dma 512.88. The stock remains bullish on techicals
The 52 week high is at 842.25 and the 52week low is at 369.40
Price Chart
P/E Chart
Sales and Margin
Strengths
– is almost debt free.
Weakness
– Though the company is reporting repeated profits, it is not paying out dividend
-The company has delivered a poor sales growth of -11.64% over past five years.
– has a low return on equity of 6.08% for last 3 years.
-Earnings include an other income of Rs.6.50 Cr.
– has high debtors of 181.01 days.
Competition
– The industry trades at a mean P/E of 40.1x. Elgi Equipments trades at the industry’s max P/E of 64.79x. REVATHI trades at a P/E of 42.5x
– Industry’s mean G-Factor is 3.2 while the mean Piotski score is 7.0. REVATHI has a G-Factor of 0 and Piotski scoreof 6.
– Average 1 month return for industry is 10.7%. The max 1- month return was given by Revathi Equipmnt: a return of 24.93 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 60.19 cr compared to Rs 46.29 cr for period ended Mar 2020, a rise of 30.0%
Company reported negative operating profit of Rs -0.19 cr for period ended Mar 2021. For same period last year, operating profit was 8.98
The EPS for Mar 2021 was Rs 3.52 compared to Rs 2.25 for previous quarter ended Dec 2020 and Rs 24.06 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 132.0 cr for period ended Mar 2021 vis-vis sales of Rs 159.0 cr for the period ended Mar 2020, a fall of 20.5%. The 3 year sales cagr stood at -6.6%.
Operating margins shrank to 4.0% for period ended Mar 2021 vis-vis 12.0% for period ended Mar 2020, contraction of 800.0 bps.
Net Profit reported at Rs 5.0 cr for period ended Mar 2021 vis-vis sales of Rs 15.0 cr for the period ended Mar 2020, falling 0%.
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The stock has given a return of 81% on a 1 Year basis vis-vis a return of 15% over the last 3 Years. – The compounded sales growth on a TTM bassis is -17% vis-vis a compounded sales growth of -7% over the last 3 Years. – The compounded profit growth on a TTM basis is -62% vis-vis a compounded profit growth of 37% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Mar 2021 public holding stood at 27.42% vis-vis 27.42% for Dec 2020
Conclusion
– is almost debt free. – Though the company is reporting repeated profits, it is not paying out dividend
-The company has delivered a poor sales growth of -11.64% over past five years.
– has a low return on equity of 6.08% for last 3 years.
-Earnings include an other income of Rs.6.50 Cr.
– has high debtors of 181.01 days.
Fundamentally, the stock remains weak on business fundamentals. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock trades above its 50 DMA 577.46 and is trading at 722.0 It has shown near term bullish momentum contrary to business fundamentals. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
